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Miami residents face their fair share of financial problems in comparison to the rest of the country. It appears more people suffer with debt and credit issues here than many other locations in Florida. With an average annual income of only $46,946, Miami residents rank among the lowest income residents in major cities throughout the country falling well below other cities the same size. It’s also the third most dangerous place to live in Florida in terms of identity theft. The unemployment rate hovers around 11.4%, and the average consumer credit card debt is almost $6,000.

The poverty rate is 21.3% in Miami, which means many families face severe economic hardships. Many cannot afford to pay all their bills every month, and this leaves them making difficult choices. When choices like this must be made, people are going to choose to pay for their secured debts before their unsecured debts. Credit cards, medical bills, and even student loans are the debts that suffer most and end up not being paid. This means many families look for help that’s not available to them in the form of a consolidation loan or another loan to minimize their debt and get their finances in order.

Debt settlement is the only option for some Miami residents, but the way it works isn’t always easy to understand. Debt settlement is not for everyone, it’s not available to everyone, and it’s a desperate measure. If you’re at a point you’re considering it, understanding the best resources for debt settlement information in Miami is essential. You’ll want to utilize the Better Business Bureau as your resource of choice, because this is where you go to find the best attorney or debt settlement companies in the city.

Understanding the Laws Surrounding Debt Settlement

Debt settlement laws are complex.

  • You must have $7,500 worth of debt
  • Debts must be unsecure
  • Creditors are not legally obligated to work with you

If you want to take advantage of debt settlement, you must learn the rules in Miami. The first is no settlement company will settle debts less than $7,500, and they must be unsecured debt. A debt with a tangible asset attached to it such as a car or home is considered a secure debt. Creditors can take something from you with a debt like this, so they won’t settle. Credit cards, medical bills, and student loans are all good examples of unsecured debts.

It’s also imperative to understand there is no law in place dictating creditors must work with you. If they want to settle you debt for less than you owe, that’s great. If they don’t want to do that, they’re not required to do that. Creditors get to make their own decisions, but it’s helpful to know any debt older than five years is one you might want to think about before you settle. If the date your account became past due and you didn’t make another payment is more than five years ago, this debt is no longer legally collectable via legal action. Debt collectors or creditors can’t garnish your wages or take you to court, and the report will fall off your credit report in less than two years. If you can wait, you should avoid offering to make this debt valid once again.

Should You Settle?

It’s not for all Miami residents. Most debt collectors have no interest in settling for less than you owe, so you won’t get far with them if you haven’t made late payments or missed payments. They’re only willing to work with customers who aren’t paying. Something is better than nothing in this case, which is why they’re more willing to work with you here.

The best candidates are those with a low income, who cannot make ends meet, and those with ample debt. You should already be making late payments, but you shouldn’t start making late payments just so you can use this program. The damage it does to your credit is devastating, and it’s not easy to come back from that.

Benefits of Debt Settlement

If you are settling your debts, it’s fun to know you will benefit. You will see any negative items being reported to credit bureaus stop. This won’t erase past late payments or missed payments, but it allows you to start fresh making good financial decisions and reports right now. You’ll settle for less than you owe, you’ll eliminate numerous payments, and you’ll take on only one interest rate. You can pay off your credit card and other unsecured debts faster, and you free up some income to help make ends meet.

Debt settlement in Miami means finding the best companies, and it means knowing you shouldn’t make payments to credit settlement companies prior to reaching agreements with your creditors. These companies typically take your money and do nothing to help. Know what you’re getting into before you settle your debts.